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Thermo Fisher Scientific Inc (NYSE:TMO)
Beneish M-Score
-2.39 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Thermo Fisher Scientific Inc has a M-score of -2.39 suggests that the company is not a manipulator.

TMO' s 10-Year Beneish M-Score Range
Min: -3.03   Max: -0.55
Current: -2.39

-3.03
-0.55

During the past 13 years, the highest Beneish M-Score of Thermo Fisher Scientific Inc was -0.55. The lowest was -3.03. And the median was -2.45.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Thermo Fisher Scientific Inc for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 1.0467+0.528 * 0.9722+0.404 * 1.1247+0.892 * 1.2314+0.115 * 0.9623
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0874+4.679 * -0.0177-0.327 * 1.2717
=-2.39

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $2,507 Mil.
Revenue was 4171.4 + 4321.9 + 3903.5 + 3466.9 = $15,864 Mil.
Gross Profit was 1933.6 + 1846.5 + 1620 + 1481.7 = $6,882 Mil.
Total Current Assets was $5,720 Mil.
Total Assets was $42,691 Mil.
Property, Plant and Equipment(Net PPE) was $2,406 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,505 Mil.
Selling, General & Admin. Expense(SGA) was $4,558 Mil.
Total Current Liabilities was $6,222 Mil.
Long-Term Debt was $11,389 Mil.
Net Income was 471.6 + 278.5 + 543.1 + 342.1 = $1,635 Mil.
Non Operating Income was 5.2 + 1.5 + 4.8 + -15 = $-4 Mil.
Cash Flow from Operations was 676 + 888.7 + 101.2 + 728.5 = $2,394 Mil.
Accounts Receivable was $1,945 Mil.
Revenue was 3191.8 + 3240.1 + 3191.5 + 3259.3 = $12,883 Mil.
Gross Profit was 1347.9 + 1363.2 + 1336.3 + 1386.1 = $5,434 Mil.
Total Current Assets was $6,210 Mil.
Total Assets was $28,273 Mil.
Property, Plant and Equipment(Net PPE) was $1,709 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,005 Mil.
Selling, General & Admin. Expense(SGA) was $3,404 Mil.
Total Current Liabilities was $2,453 Mil.
Long-Term Debt was $6,718 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(2507.1 / 15863.7) / (1945.1 / 12882.7)
=0.15804005 / 0.15098543
=1.0467

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(1846.5 / 12882.7) / (1933.6 / 15863.7)
=0.42176718 / 0.433808
=0.9722

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (5719.9 + 2406.1) / 42690.8) / (1 - (6210.4 + 1708.7) / 28272.5)
=0.80965454 / 0.71990096
=1.1247

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=15863.7 / 12882.7
=1.2314

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(1005 / (1005 + 1708.7)) / (1505.4 / (1505.4 + 2406.1))
=0.37034307 / 0.38486514
=0.9623

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(4558.2 / 15863.7) / (3404.2 / 12882.7)
=0.28733524 / 0.26424585
=1.0874

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((11388.6 + 6222.1) / 42690.8) / ((6717.9 + 2453) / 28272.5)
=0.41251745 / 0.32437528
=1.2717

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(1635.3 - -3.5 - 2394.4) / 42690.8
=-0.0177

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Thermo Fisher Scientific Inc has a M-score of -2.39 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Thermo Fisher Scientific Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.96350.99951.72650.4050.94640.990311.09440.94561.0284
GMI 1.00741.01331.09741.05950.97421.00640.97920.98020.97981.0022
AQI 1.00431.19261.2490.99820.95580.99371.01891.02381.00090.8338
SGI 1.16141.19361.442.57051.07710.9631.04561.09351.08231.0464
DEPI 0.7730.66241.89810.43010.97541.03251.04811.01810.95841.0046
SGAI 1.03861.01881.0120.89320.98061.02940.98411.03450.99790.9817
LVGI 0.83411.31740.68750.91340.90881.01291.02271.8861.0061.1918
TATA 0.0206-0.0201-0.0113-0.0341-0.0208-0.0365-0.0203-0.0146-0.0315-0.0214
M-score -2.25-2.46-1.12-1.77-2.56-2.70-2.54-2.67-2.62-2.64

Thermo Fisher Scientific Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.96020.9190.94870.94861.00571.01861.02841.29661.20091.0467
GMI 0.97110.97530.97730.98530.99851.00051.00221.00320.99620.9722
AQI 1.04490.99451.00090.98820.96390.94720.83381.04871.10261.1247
SGI 1.11571.09911.07871.05961.04841.0441.04641.09161.16491.2314
DEPI 0.88870.89250.95840.9591.00650.99531.00461.19781.07890.9623
SGAI 1.0321.01340.99980.98280.98460.98120.98171.03441.05651.0874
LVGI 1.32451.05041.0061.02761.02580.93571.19181.35511.28611.2717
TATA -0.032-0.0342-0.0315-0.0264-0.0222-0.0211-0.0214-0.0058-0.0162-0.0177
M-score -2.68-2.67-2.62-2.62-2.56-2.52-2.64-2.23-2.28-2.39
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